Sports betting has seen explosive growth in the United States, especially since the Supreme Court struck down the federal ban in 2018. However, the legal landscape varies widely from state to state. Understanding the laws governing sports betting in the U.S. is crucial for ensuring you’re betting legally and responsibly. Here’s everything you need to know about the legalities of sports betting in the U.S.
1. The 2018 Supreme Court Ruling
The Professional and Amateur Sports Protection Act (PASPA) of 1992 prohibited sports betting in most states. In May 2018, the Supreme Court overturned PASPA, giving states the authority to legalize and regulate sports betting at their discretion.
What This Means:
- Sports betting is no longer federally banned but must adhere to state laws.
- Each state has the power to decide whether to allow sports betting and how to regulate it.
2. States Where Sports Betting Is Legal
As of now, over 30 states have legalized sports betting in some form, either in-person, online, or both. Popular markets like New Jersey, Nevada, and Pennsylvania lead the way, offering a mix of retail sportsbooks and mobile apps.
Key Details:
- States like New York and Illinois allow online betting with certain restrictions.
- Some states, such as Utah and Hawaii, have no legal sports betting due to cultural or legislative opposition.
- Tribal casinos in some states operate under their own regulatory frameworks.
3. Online vs. Retail Betting
States often differentiate between online (mobile apps and websites) and retail (physical locations) sports betting. Some states, like New Jersey, allow both, while others, like Montana, only permit betting in specific retail venues.
What to Check:
- Whether online sportsbooks are licensed and operational in your state.
- Location restrictions—many apps use geolocation technology to ensure users are within state borders.
- Retail-only states may require you to visit a physical location to place bets.
4. Age Requirements
The legal age for sports betting is generally 21, but some states set the minimum age at 18 for certain forms of gambling.
What to Know:
- Always verify the age requirement in your state before betting.
- Online platforms require age verification during the signup process.
5. Federal Regulations and Restrictions
While the 2018 ruling opened the door for state-level legalization, federal laws still impose certain restrictions:
- The Wire Act of 1961: Prohibits the use of wire communication for interstate sports betting. This means bettors cannot place wagers across state lines.
- Unlawful Internet Gambling Enforcement Act (UIGEA): Regulates online gambling and ensures sportsbooks operate legally.
6. Taxes on Sports Betting Winnings
Sports betting winnings are considered taxable income in the U.S., and bettors are required to report them to the IRS.
What to Know:
- Sportsbooks may issue a W-2G form for significant wins, typically over $600.
- Keep track of your wins and losses for accurate tax reporting.
- Many states also impose their own gambling taxes.
7. Gray Areas and Offshore Sportsbooks
Despite the growing number of legal sportsbooks, some bettors turn to offshore operators due to convenience or higher odds. However, these platforms operate outside U.S. laws, posing significant risks.
Why to Avoid Them:
- Lack of legal protection for your funds or personal information.
- No guarantee of fair play or timely payouts.
- Legal consequences if authorities crack down on offshore betting.
Final Thoughts
The legalities of sports betting in the U.S. can be complex, but staying informed about your state’s regulations is essential for a safe and legal betting experience. By choosing licensed sportsbooks, adhering to local laws, and paying your taxes, you can enjoy the excitement of sports betting without any legal worries.
Relevant Links/Sources:
- State-by-State Sports Betting Laws: https://www.americangaming.org
- IRS Guidelines on Gambling Winnings: https://www.irs.gov